US-based gaming company Bally’s Corporation announced its agreement to purchase the Tropicana Las Vegas, Nevada casino from Gaming and Leisure Properties, Inc. (GLPI), a publicly traded gaming-focused real estate investment trust. According to Bally’s the transaction is valued at approximately $308 million.
The purchase price for the Tropicana property’s non-land assets is estimated at $150 million. Furthermore, Bally’s has agreed to lease the land underlying the Tropicana property from GLPI for an initial term of 50 years at an annual rent of $10.5 million, subject to increase over time. The two companies will also enter a sale-and-leaseback transaction similar to Bally’s Black Hawk, IL Casino, CO and rock Island, properties for a cash purchase price of $150 million payable by GLPI. The lease will have initial annual fixed rent at $12, which will eventually increase over time.
This deal is expected to be accretive to Bally’s shareholders long-term and will not require any cash outlay from Bally’s at closing. Bally’s and GLPI have both agreed to make use of commercially reasonable ventures to negotiate and enter into definitive documents with respect to these transactions as promptly as practicable in order to fully reflect the contemplated terms.
“Landing a preeminent spot on the Las Vegas Strip is a key step for us. The Strip is visited by over 40 million players and guests per year, which we believe will significantly enhance Bally’s customer base and player database, as well as unlock marketing opportunities to leverage the iconic Bally’s brand. The expansion will also support the growth and development of our online and interactive business. We look forward to exploring significant redevelopment of the property, which we believe will enhance its financial profile,” George Papanier, President and Chief Executive Officer at Bally’s Corporation, said.